The UK government’s recent public statement that it intends to stop working with businesses that don’t pay their suppliers on time is a huge sea change and shows real commitment and action behind the words. It might just work if the government continues to keep the pressure up and rewards the better payers.
According to the UK’s Federation of Small Businesses (FSB), SMEs play a more significant role in the UK economy than many realise, but are often overshadowed by the achievements of big corporates. At the start of 2018, the FSB identified that 99.9% of businesses in the UK were small and medium-sized, employing 16.3 million people and with a combined turnover of £2 trillion. Successful SMEs become the large businesses of the future and as the lifeblood of the UK economy it is essential they are nurtured, protected and encouraged to remain in business.
But, according to UK government data analyzed by CIPS, on average, large businesses pay almost a third (31%) of their invoices late. That’s huge. Late payments cause insolvencies, stress and thousands of SMEs to go out of business each year.
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